You know the theory of “supply and demand,” but if you only thought it was relevant to pass a college economics class, you’re missing out on one of the most crucial components of the recruitment process. Supply and demand should play a role in your everyday approach to finding the right candidates to fill your open positions or build your talent pool.
What Exactly Is Supply and Demand?
Here’s an official definition, according to Encyclopaedia Britannica:
Supply and demand, in economics, [is the] relationship between the quantity of a commodity that producers wish to sell at various prices and the quantity that consumers wish to buy. It is the main model of price determination used in economic theory. The price of a commodity is determined by the interaction of supply and demand in a market. The resulting price is referred to as the equilibrium price and represents an agreement between producers and consumers of the good. In equilibrium the quantity of a good supplied by producers equals the quantity demanded by consumers.
How Does It Fit Into Your Recruitment Strategy?
What does the law of supply and demand in economics have to do with the world of recruitment? A lot, actually. Recruiters need to be in a position to identify, based on their hiring needs at a given time, what the supply and demand of candidates look like in different locations — and to be able to make recruitment decisions accordingly.
What open positions need to be filled? What are the requirements of the position? Based on this, where is there a surplus vs a dearth of qualified candidates?
As John Zappe points out on ERE:
Supply and Demand … can tell a recruiter where the particular fish that is being sought is most plentiful. On a strategic level, the data can be used to help site new offices and plants, decide whether to hire or train, what the competition across town is paying, and how many workers there are with the specific skills a company needs.
Supply and demand data can help you more effectively recruit in today’s marketplace by providing analytics and insights into both active job seekers AND competitors.
For example: Are you receiving too few applications? Does the compensation you’re offering appear to be too low to attract the right candidates? This is where supply and demand data comes in.
How Do You Get the Data You Need?
CareerBuilder’s Supply & Demand portal is a perfect place to start. The portal enables recruiters to conduct a quick keyword/location search and get facts about the available candidates and competition for that position — then share that data with hiring managers to better set expectations for the recruitment marketplace.
This data should ideally be used when the job requisition is first opened. Recruiters who run a search in the Supply & Demand portal will get insights into the hiring landscape and will be a step ahead of their peers. They will have the opportunity to:
- Learn which competitors are seeking out candidates for similar roles.
- Find additional locations to consider when sourcing or posting a job.
- Uncover more keywords to use when conducting a Boolean search in their sourcing tools.
Simply put, recruiters who use the Supply & Demand Portal at the beginning of their recruitment process will be able to fill their open positions faster.
OK, You Have Supply and Demand Data – Now What?
You should use supply and demand data to help steer your conversations, shape priorities and make better decisions.
Start by pulling the data on every open position you have and sharing it with your hiring manager and other key stakeholders. This data can help set expectations about how many possible candidates are available in a particular location, as well as help everyone understand the type of skills and industry background that is standard for such a position.
In today’s competitive marketplace, you can’t afford to wait long to contact potential candidates, because your competitors could snatch them up from right under your nose if you drag your feet. By being smart with data from the start, you can better use your time and resources and assess the marketplace for your open requisitions.
Keep These Three Tips in Your Pocket.
The trick is to find the ideal job title and location combination in the Supply & Demand Portal, as this insight can increase the number of applications from candidates by as much as two to 10 times. Keep these tips in mind:
1) Use the data you have to shape compensation conversations. Compensation ranges and benefit packages are big lures for candidates, so if the budget for compensation is lower than the marketplace rate, it will take longer to find the right candidate. Recruiting is a cost, quality and speed decision – you need to know what’s most important to the hiring manager and look at how the data can support that. By sharing third-party data with your hiring manager, you can be seen as a consultant and expert in the space. The data can be the bridge that makes the relationship between you and the hiring manager stronger.
2) Conduct a search for the key skill you need. Next, look at the “What are their most recent job titles?” chart to see the list of common job titles for that skill. We see many companies using job titles that are more internal company lingo titles versus standard job titles that candidates would actually be searching for. Be open to posting your jobs with a common job title so you can catch more potential candidates with the right skill set.
3) Look at the hiring indicator map tab to see which cities have the best ratio of candidates to job competition and compensation. By considering another nearby city to post in or source, the chance of more candidates applying or being available will go up. If you post your jobs in multiple locations, you could see a quicker return on your investment and fill your positions faster.
The below chart shows the improved job titles the CareerBuilder team chose using Supply & Demand data, next to the original job title the client had posted. Upon reviewing the data, they also picked more ideal locations. As you can see, some of the job postings received up to 10 times more applications by making those small changes to job title and location.
In this current labor market, health care and technology positions tend to receive very few applications because of the limited supply of candidates. Therefore, this increase of candidates to consider was a huge win for the recruitment team.
Want to better predict the future when comes to hiring great people? Find out how CareerBuilder’s Supply and Demand tools can give you the labor market insight you need to build an effective recruitment strategy.